Designing Cash Transfer Programs for an Older Population

The Mexican Case

Published in: The Journal of the Economics of Ageing, Volume 9 (June 2017), Pages 111-121. doi: 10.1016/j.jeoa.2016.09.001

Posted on on June 28, 2017

by Emma Aguila, Arie Kapteyn, Caroline Tassot

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Aging populations and the prevalence of poverty in old age have led to the introduction of noncontributory pensions in many countries. We consider a number of alternative targeting approaches and simulate their effects in an empirical application in the State of Yucatan, Mexico. We compare the approaches with respect to leakage, under-coverage, and their effects on government budgets. We are also able to compare the simulated effects of one alternative with the observed effect of a recently introduced demogrant and find that the simulation is a close approximation of the empirical outcomes. We discuss issues of implementation and political feasibility.

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